The Australian dollar kicks the week off to modest gains, although there appear to be cracks forming on the current bullish stance after posting an intraday high of US$0.6919 before easing back to settle a few pips above the US$0.6900 handle.
Since rebounding from the bearish trigger level at US$0.6845, after three consecutive challenges failed, the focus now shifts to the U.S and China trade progress after the Trump administration’s decision to remove China from its list of currency manipulators ahead of Wednesday’s “phase one” trade deal signing ceremony.
With the so-called “Phase-One” deal baked in; China’s top trade negotiator is due to arrive in Washington on Tuesday.
The U.S. is hoping this deal will lead to a new start on trade with China, and the Trump Administration says the deal will create a level playing field for American farmers and manufacturers.
After nearly three years of tweets, self-proclaimed “Tariff Man”, President Trump now looks to this Wednesday’s signing of the so-called “Phase-One” deal.
White House trade adviser Peter Navarro said the U.S. and China “Phase-One” trade deal that President Donald Trump will sign would allow the United States to swiftly reimpose tariffs if it unilaterally determines that China has broken any of its commitments.
From a technical standpoint, as the bulls slowly chip-away the resistance, from US$0.6955, should limit any advancement.
Looking to the downside, a decisive break of US$0.6845 would see an extension to the bearish sentiment and expose the region of US$0.6770.